Cabinet approves amalgamation of Lakshmi Vilas Bank with DBS Bank
The Govt has asked the RBI to take action against the people in the management who drives banks to the brink of collapse, added Prakash Javadekar
New Delhi: Union Cabinet approves Scheme of Amalgamation of Lakshmi Vilas Bank with Development Bank India Ltd (DBIL), a private bank announced Union Minister Prakash Javadekar. With this, there will no further restrictions on the depositors regarding the withdrawal of their deposits.
Union Cabinet approves Scheme of Amalgamation of Lakshmi Vilas Bank with Development Bank India Ltd (DBIL), a private bank. With this, there will no further restrictions on the depositors regarding the withdrawal of their deposits: Union Minister Prakash Javadekar pic.twitter.com/XbkUacBDHI
— ANI (@ANI) November 25, 2020
The Govt has asked the RBI to take action against the people in the management who drives banks to the brink of collapse, added Prakash Javadekar
The Union Cabinet, chaired by Prime Minister Narendra Modi on Wednesday gave its approval to the amalgamation of Lakshmi Vilas Bank Limited (LVB) with the wholly-owned subsidiary of Singapore based DBS Bank in India.
With this, there will no further restrictions on the depositors regarding the withdrawal of their deposits, Union Minister Prakash Javadekar said.
On November 17, the Reserve Bank of India had unveiled a draft scheme to amalgamate private sector lender LVB with DBS Bank India Ltd (DBIL). The decision followed soon after the RBI imposed a one-month moratorium on the private lender and capped deposit withdrawals at Rs 25,000. The step was taken on the advice of the RBI in view of the private sector bank’s deteriorating financial health.
Cabinet approves the Memorandum of Understanding between the Institute of Chartered Accounts of India (ICAI) and the Vereniging van Registercontrollers (VRC), the Netherlands.
— ANI (@ANI) November 25, 2020
“The government has asked the Reserve Bank of India (RBI) to take action against the people in the management who drive banks to the brink of collapse,” Javadekar said.
After inviting suggestions and complains from the public, RBI prepared the scheme for the bank’s amalgamation. With the approval of the scheme, LVB will be amalgamated with DBIL from the appointed date, and with this, there will no further restrictions on the depositors regarding the withdrawal of their deposits.
The speedy amalgamation and resolution of the stress in LVB is in line with the Government’s commitment to a clean banking system while protecting the interests of depositors and the public as well as the financial system.
DBS has been in India since 1994. In March 2019, to expand the franchise and build greater scale, DBS converted its India operations to a wholly-owned subsidiary, DBIL. It is present in 24 cities across 13 states as of now.
LVB has a 94-year old history in India, with established retail and small and medium enterprises customer base and a strong presence in south India.
The LVB was placed under an order of moratorium on November 17, 2020, which will be effective up to December 16, 2020, under section 45 of the Banking Regulation Act, 1949.